Building an

> Impact highlights

2021

> Foreword by Fund

inclusive world
Manager

> Advancing financial

inclusion

> Impact management

process
Triodos Microfinance Fund
Impact Report 2021
> Impact investments

> Impact data overview

> Impact measurement

> Contact

TLIM
This is a marketing communication. Please refer to the prospectus and the KIID of Triodos Microfinance Fund before making any final investment decisions. An overview of the investor’s rights can be found in the prospectus.
The value of your investment can fluctuate because of the investment policy. Triodos Microfinance Fund is managed by Triodos Investment Management. Triodos Investment Management holds a license as alternative
investment fund manager and UCITS and is under the supervision of the Dutch Authority Financial Markets and De Nederlandsche Bank.
> Impact highlights
2021
Impact highlights 2021
> Foreword by Fund

17.6M
Manager

> Advancing financial

inclusion borrowers reached

> Impact management

69% 372,000 100+
462,000
process investments in
in rural areas households received an
> Impact investments affordable housing loan
people made use
> Impact data overview of a green loan

41
18.6M
> Impact measurement
countries
> Contact
savers reached

6.7M 99,000 22
borrowers received an students took out equity investments with active
agricultural loan an education loan board membership

76% Key Sustainable Development

female borrowers Goals contributed to:

2 Triodos Microfinance Fund Impact Report 2021

> Impact highlights
2021
Resilience and recovery
> Foreword by Fund Foreword by Fund Manager Tim Crijns
Manager

> Advancing financial Even though the pandemic made all aspects of life more challenging for
hundreds of millions of people, 2021 also marks the year of resilience and
inclusion recovery in emerging and developing markets. People and businesses
were agile and quick to respond to new circumstances; they are the
> Impact management driving force for social and economic recovery. However, we must also
process realise that this recovery remains fragile.

Providing access to finance is a crucial component of navigating and

> Impact investments fostering this resilience and recovery. This impact report reflects how,
more than ever, Triodos Microfinance Fund is committed to contributing
> Impact data overview to an accessible, transparent and robust financial sector in emerging
and developing markets. The report showcases how bringing people and
> Impact measurement businesses into the financial system empowers them and enables them
to get access to basic needs, such as affordable housing, education and
clean energy.
> Contact
Looking ahead, Triodos Microfinance Fund wants to continue to be a
connecting and engaging force between investors who want to make
money work for positive change and values-driven organisations that use
financial services to deliver sustainable development. By doing so, we
can build a resilient and inclusive economy that benefits all.

Tim Crijns
Fund Manager Triodos Microfinance Fund

3 Triodos Microfinance Fund Impact Report 2021

> Impact highlights
2021
Advancing financial inclusion
> Foreword by Fund The overall objective of Triodos Microfinance The call and urgency for financial inclusion is also
Manager Fund is to offer investors a financially and socially embedded in the UN Sustainable Development
sound investment in Financial Inclusion, thereby Goals (SDGs). The paper ‘Achieving the Sustainable
> Advancing financial contributing to an accessible, well-functioning and Development Goals. The Role of Financial Inclusion’
inclusive financial sector in developing countries and Serving the published by CGAP and the UNSGSA reports that
inclusion emerging economies, which empowers people and underserved research shows that bringing people into the financial
businesses to achieve their goals and aspirations, system can be instrumental in attaining many SDGs.
> Impact management and fuels social and economic development. The fund contributes to the following SDGs:
process
Advancing
Why do we invest in financial inclusion? financial
> Impact investments inclusion
Globally, 1.7 billion people have no or limited access
> Impact data overview to basic financial services. Furthermore, many Promoting Building robust
micro, small and medium-sized enterprises in access to basic financial
> Impact measurement developing countries have unmet financing needs. needs institutions
Financial inclusion offers these underserved groups
access to basic financial services, thereby enabling
> Contact them to build their assets gradually, develop their
enterprises, improve their income earning capacity Serving the underserved
and save for future events. • borrowers reached
• female borrowers
Financial Inclusion also plays a crucial role in • rural borrowers
addressing other pressing issues, such as access • savers reached
to education and healthcare, renewable energy and
affordable housing. New technologies may play Build robust financial institutions
an important role to enhance and foster access to • active board memberships
financial services. • diverse range of (non)financial
services
• environmental practices, e.g.
exclusion list

Promoting access to basic needs

• affordable housing loans
• educational loans
• green loans
• agriculture loans

4 Triodos Microfinance Fund Impact Report 2021

> Impact highlights
2021
A values-driven investment process
How we manage impact
> Foreword by Fund
Manager
1 2 3
Deal sourcing and screening Due diligence and negotiation Investment decision
> Advancing financial
inclusion Screen for investment companies Detailed assessment on positive Investment proposal and Invest-
contributing to fund’s impact objectives impact (end) clients and focus ment Committee discussion cover
sectors and segments both sustainability and impact
> Impact management Assess adherence to Triodos and our contribution as investor
Minimum Standards Detailed assessment of the
process investee sustainability including Deal structure, covenants and
First stage proposal presents connection governance practices conditions as well as E&S agree-
to fund’s impact objective and initial ments prior or subsequent to
> Impact investments sustainability analysis of the investee. Engagement with investee on disbursement or renewal (optional)
­mitigation of material sustain­
> Impact data overview ability risks, potential to increase Decision on potential board
desirable positive impact, and seats for equity investments
assessment of its financial value
> Impact measurement

> Contact
Communication and reporting
Impact reporting and thought leadership
publications and events
Industry advancement by proactively
contributing to relevant sustainability
and impact initiatives and knowledge
sharing with financial market
participants
6 5
Monitoring and reviewing
Investment and portfolio
monitoring, monitoring of
agreed targets to achieve
impact
Investment review (potential
change, renewal, termination)
Investment company
knowledge sharing,
engage­ment and
­technical assistance
4
Signing and closing
ESG covenants and conditions in
contract documentation
Add exclusion list to loan
agreement
Reporting requirements in contract
documentation including specific
indicators or targets

Internal learning & adapting

Positive impact Do no significant harm Manage sustainability risk Investor contribution Over the course of 2021 and 2022, we implement changes to
the investment process based on our impact ambitions and
sustainability regulations (e.g. EU SFDR, EU Taxonomy, MiFID II).
5 Triodos Microfinance Fund Impact Report 2021
> Impact highlights
2021
Impact investments
> Foreword by Fund Click here to access an interactive world map that shows the Green and inclusive
Manager fund’s investments in 2021.
CDB’s strategy is to be Sri Lanka's
leading player in financing the transition
to a green and inclusive economy.
> Advancing financial
> Find out more here
inclusion

> Impact management

process
Tech and touch
> Impact investments Digital lending platform
Liwwa provides fast,
affordable credit to
> Impact data overview small businesses in
Jordan via a ‘tech and
> Impact measurement touch’ approach.
> Find out more here

> Contact

SME growth
Sidian Bank contributes
Access to affordable housing
to sustainable
La Hipotecaria provides development and jobs in
mortgages to low(er)-middle Kenya by enabling SMEs
income households in El Salvador. to scale and flourish.
> Find out more here > Find out more here

6 Triodos Microfinance Fund Impact Report 2021

> Impact highlights
2021
Impact data overview
Goal: providing access to finance for underserved client groups
> Foreword by Fund
Key SDGs contributed to:
Manager

> Advancing financial

inclusion

> Impact management

process year-end 2021 year-end 2020 Change IRIS+ code

Number of borrowers reached (in millions) 17.6 18.2 -3% PI4060

> Impact investments
Borrowers reached attributable to the fund 269,000 315,000 -15% PI4060
> Impact data overview

> Impact measurement Number of savers reached (in millions) 18.6 20.5 -9% PI4060

> Contact
Percentage female borrowers 76% 75% +1% PI8330, PI4060

Percentage rural borrowers 69% 70% -1% PI1190, PI4060

Average loan amount per region

year-end 2021 year-end 2020 Change IRIS+ code

Average loan amount (EUR) 2,210 1,854.76 19.1% PI7569, PI4060

Africa and Middle East 1,420 1,403 1.2% PI7569, PI4060

East Asia & Pacific 2,243 1,990 12.7% PI7569, PI4060

Eastern Europe & Central Asia 2,905 2,044 42.1% PI7569, PI4060

Latin America 9,001 7,208 24.9% PI7569, PI4060

South Asia 559 452 23.9% PI7569, PI4060

7 Triodos Microfinance Fund Impact Report 2021

> Impact highlights
2021
Impact data overview
Goal: providing access to basic needs
> Foreword by Fund
Key SDGs contributed to:
Manager

> Advancing financial

inclusion

> Impact management

process year-end 2021 year-end 2020 Change IRIS+ code

Number of students who took out an 99,000 395,000 -75% PI4060

> Impact investments educational loan

Number of households that received an 372,000 854,000 -56% PI4060

> Impact data overview affordable housing loan

> Impact measurement Number of people that made use of a 462,000 847,000 -45% PI4060
green loan

> Contact Number of borrowers that received an 6.7 7.1 -6% PI4060
agricultural loan (in millions)

Explanation of changes

For 2021, the impact indicators show the following image. The main reason for the decrease in providing
financial access to underserved client groups can be attributed to the COVID-19 pandemic. Economic
activity declined in many local economies leading to less loans being disbursed, which caused the
number of loan and saving clients reached to decrease in 2021 compared to 2020; the percentage
female and rural borrowers remained largely the same.

Additionally, COVID-19 measures imposed by local governments have had grave consequences for the
promotion of access to basic needs. The number of loans for affordable housing, quality education and
clean energy halved in 2021. In particular, educational loans show drastic changes compared to last
year. With COVID-19 closing schools for a longer period of time, less educational loans were distributed.

8 Triodos Microfinance Fund Impact Report 2021

> Impact highlights
2021
Impact data overview
Goal: building robust, transparent and professional financial institutions
> Foreword by Fund
Manager
22 equity investments with active board membership
> Advancing financial Triodos Microfinance Fund has equity positions in 22 institutions and funds and plays an active role on the Board of Directors or advisory committees. In this way
we bring our sustainable banking knowledge and expertise to the table and participate in the institutions’ governance and strategic development. Examples include
inclusion knowledge sharing sessions on topics like risk, audit, governance structure, ESG frameworks and values-driven banking.

> Impact management

process Diverse product offering Non-financial services Care for the environment
Microfinance and SME clients are interested in more Financial literacy training and other non-financial Triodos Microfinance Fund stimulates efforts
than just taking out loans. They also want to be able services help improve end clients’ abilities to better by financial institutions to make environmental
> Impact investments to take out insurance and transfer money. A growing manage their finances and improve their business protection a priority. For example, working with an
number of financial institutions, also in the fund’s skills and living conditions. exclusion list on sectors or specific activities that
> Impact data overview portfolio, can meet these requirements. need to be avoided due to the potential negative
impact they have on the environment and society.
> Impact measurement
% of investees offering other financial services % of investees with non-financial services % of investees with environmental practices
> Contact year-end 2021 year-end 2021 year-end 2021

Insurance products 56 Financial literacy programme 61 Exclusion list 80

Money transfer services 44 Enterprise development training 44 Environmental criteria in credit assessment 69

Savings products 42 Social awareness training 40 Internal green office procedures 65

Debit card 32 Technical assistance 31

Donations to environmental projects 23

9 Triodos Microfinance Fund Impact Report 2021

> Impact highlights
2021
Impact measurement
> Foreword by Fund The data for this impact report is derived from our
Manager online investee portal. In this portal, the financial
institutions in the fund’s portfolio provide extensive Advancing Investing for impact
> Advancing financial data on social and environmental topics. The financial inclusion Do you want to find out more how
indicators that we publish are, when possible, aligned
inclusion with the IRIS metrics of the Global Impact Investing Do you want to find out more about Triodos IM invested for impact
Network.
Triodos Microfinance Fund? in 2021? Go to our website.
> Impact management
Furthermore, the Triodos Sustainability Banking Go to our website.
process
Assessment Scorecard helps to analyse, monitor and
report on the non-financial performance of the fund’s
> Impact investments portfolio companies in an effective and transparent
way. The scorecard consists of 25 indicators grouped
> Impact data overview in five dimensions: Environment, Management &
Staff, Product Range, Responsible Finance and
> Impact measurement Governance. It takes into account relevant industry
initiatives, including Universal Standards for Social
and Environmental Performance of the Social
> Contact Performance Taskforce.

Disclaimer
> This document has been carefully prepared and is presented by Triodos Investment Management.
> It does not carry any right of publication or disclosure, in whole or in part, to any other party.
> This document is for discussion purposes only.
> The information and opinions in this document constitute the judgment of Triodos Investment Management at the time specified and may be subject to change without notice, they are not to be relied
upon as authoritative or taken in substitution for the exercise of judgment by any recipient. Under no circumstances is it to be used or considered as an offer to sell, or solicitation of any offer to buy,
nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or be taken as investment advice.
> Triodos Microfinance Fund is managed by Triodos Investment Management BV. Triodos Investment Management is a licensed AIFM and UCITS management company under the Financial Supervision
Act by the Dutch Financial Markets Authority (Autoriteit Financiële Markten, AFM).
> The content of this document is based upon sources of information believed to be reliable, but no warranty or declaration, either explicit or implicit, is given as to their accuracy or completeness.
> This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.
> All copyrights patents and other property in the information contained in this document is held by Triodos Investment Management and shall continue to belong to Triodos Investment Management.
No rights whatsoever are licensed or assigned or shall otherwise pass.

10 Triodos Microfinance Fund Impact Report 2021

> Impact highlights
2021

> Foreword by Fund

Manager

> Advancing financial

About Triodos Investment Management Investing in positive change
inclusion
Triodos Investment Management (Triodos IM) is For more information about our impact investment
> Impact management
a globally active impact investor. We see impact strategies and solutions, please contact our Investor
process investing as a driving force in the transition to a Relations team at:
green, inclusive and resilient economy.
+31 (0)30 694 2400
> Impact investments
We have built up in-depth knowledge throughout TriodosIM@triodos.com
our 25+ years of impact investing in sectors such www.triodos-im.com
> Impact data overview
as Energy and Climate, Financial Inclusion and
Sustainable Food and Agriculture. Triodos IM also Published
invests in listed companies that support sustainable
> Impact measurement April 2022
solutions for the future.
Text
> Contact Assets under management as per end of December Triodos Investment Management
2021: EUR 6.4 billion.
Cover photo
Triodos IM is a wholly owned subsidiary of Triodos Retail Capital, South Africa
Bank, a leading expert in sustainable banking.
Design and layout
Via Bertha, Utrecht

TLIM